The Dallas lawyer accused by the inspector general of the Securities and Exchange Commission of letting R. Allen Stanford get away with defrauding investors of $7 billion is free to practice law again before the SEC.
Spencer Barasch worked 17 years for the SEC, including seven years as its chief of enforcement at the division office located in Fort Worth. After he resigned in 2005, he began representing Stanford before the SEC.
The inspector general’s report concluded that over the years as enforcement chief he had repeatedly denied federal investigators’ pleas to investigate suspicious aspects of Stanford’s offshore investment accounts, which later were determined to have been frauds.
Barasch denied wrongdoing at the time. He paid $50,000 to the Department of Justice to settle civil claims alleging impropriety stemming from his later decision to take Stanford on as a client, a decision he eventually reversed.
Stanford was indicted in 2009 and convicted last year. He is serving a 110-year sentence in federal prison.
Last year, the SEC suspended Barasch from practicing before the commission, and said he could apply for readmission in one year. Barasch’s attorney released a statement at the time saying that Barasch had accepted the suspension to save on legal bills. The settlement order specifically stated that Barasch neither admitted nor denied the wrongdoing described in the order.
Barasch was head of enforcement for the SEC’s Fort Worth office from 1998 to April 2005. After leaving the government, he represented Stanford before the SEC in 2006.
A 2010 article in The Dallas Mornings News about the inspector general’s report included this anecdote:
In 2005, the report said, an SEC staff attorney presented the agency’s latest findings at a regional meeting of securities law enforcers attended by Barasch. The audit showed growing concern that the alleged Ponzi scheme was growing and putting billions of dollars at risk.
During the presentation, Barasch was said to look “annoyed.” Afterward, he reportedly told the attorney he had “no interest” in bringing action against Stanford.
“I thought I’d turned in a good piece of work and was talking about it to significant players in the regulatory community,” Victoria Prescott, the attorney, said in the report. “And I no sooner sit down, shut up and the meeting ended, but then I got pulled aside and was told this has already been looked at and we’re not going to do it.”
Some former colleagues defended him, however, with one telling The News that, at worst, he had used bad judgment.
Spencer Barasch worked 17 years for the SEC, including seven years as its chief of enforcement at the division office located in Fort Worth. After he resigned in 2005, he began representing Stanford before the SEC.
The inspector general’s report concluded that over the years as enforcement chief he had repeatedly denied federal investigators’ pleas to investigate suspicious aspects of Stanford’s offshore investment accounts, which later were determined to have been frauds.
Barasch denied wrongdoing at the time. He paid $50,000 to the Department of Justice to settle civil claims alleging impropriety stemming from his later decision to take Stanford on as a client, a decision he eventually reversed.
Stanford was indicted in 2009 and convicted last year. He is serving a 110-year sentence in federal prison.
Last year, the SEC suspended Barasch from practicing before the commission, and said he could apply for readmission in one year. Barasch’s attorney released a statement at the time saying that Barasch had accepted the suspension to save on legal bills. The settlement order specifically stated that Barasch neither admitted nor denied the wrongdoing described in the order.
Barasch was head of enforcement for the SEC’s Fort Worth office from 1998 to April 2005. After leaving the government, he represented Stanford before the SEC in 2006.
A 2010 article in The Dallas Mornings News about the inspector general’s report included this anecdote:
In 2005, the report said, an SEC staff attorney presented the agency’s latest findings at a regional meeting of securities law enforcers attended by Barasch. The audit showed growing concern that the alleged Ponzi scheme was growing and putting billions of dollars at risk.
During the presentation, Barasch was said to look “annoyed.” Afterward, he reportedly told the attorney he had “no interest” in bringing action against Stanford.
“I thought I’d turned in a good piece of work and was talking about it to significant players in the regulatory community,” Victoria Prescott, the attorney, said in the report. “And I no sooner sit down, shut up and the meeting ended, but then I got pulled aside and was told this has already been looked at and we’re not going to do it.”
Some former colleagues defended him, however, with one telling The News that, at worst, he had used bad judgment.
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